OCT. 9 | PHYSICAL: If the lackluster economy this year has been good to one business, it’s packaged media rental.

U.S. consumer spending on rentals of DVD and Blu-ray Disc surged 9.9% in the third quarter over the same period in 2008, according to Rentrak Corp.’s Home Video Essentials, as consumers hunkered down with inexpensive entertainment. Rental spending across both formats and all retail channels hit $1.6 billion in the quarter, fueled by big gains in Blu-ray and the growing popularity of Redbox.

For the full year through September, overall rental spending is up 8.2%, to $5 billion, according to Rentrak.

“The widespread distribution of Blu-ray titles into the primary rental channel is supporting the rapid adoption of the format by consumers, greater than what we saw on DVD,” Rentrak VP Brad Hackley said.

Consumers spent more than $111 million renting Blu-ray discs through bricks-and-mortar and online outlets in the third quarter, 44.5% more than a year earlier. Year-to-date Blu-ray rentals are up 53.8% to $313 million, Rentrak reports.

DVD rentals through traditional and online retailers are off 2.8% for the year, to $4 billion.

The kiosk channel still represents just about 14% of all rentals, but is growing at a speedy clip. Kiosk rentals have grown by more than 120% this year, as Redbox has surpassed more than 17,000 kiosks in stores and Blockbuster and NCR gear up their kiosk joint venture.

Kiosks face new challenges in the fourth quarter, however, as 20th Century Fox Home Entertainment, Universal Studios Home Entertainment and Warner Home Video all impose a window of four weeks or more after their titles’ general release for the kiosk channel. The three studios combined represent about a 40% share of the rental business.

The studios are concerned that inexpensive kiosk rentals and the used DVD inventory they create cannibalize higher-margin revenue streams, particularly DVD sales.

DEG: The Digital Entertainment Group is expected to release industrywide third-quarter home entertainment results, including DVD and Blu-ray sales, shortly.